Horticulture trade intelligence A custom report compiled for Hort Innovation by Euromonitor International Avocado Quarter 1: January to March 217
Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Contact Tim Foulds Head of Research, Australasia Phone: +61 2 9581 92 Direct: +61 2 9581 9211 Tim.Foulds@euromonitor.com This report has been funded by Hort Innovation using the avocado industry R&D levy with contributions from the Australian Government. Content Industry highlights 1 Competitor insights 4 Trade flow 5 Operating environment 1 Market overview 11 Appendix 15
Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Quarterly highlights: Summary South East Asian markets remain key to Australian success 217 export volumes increased by 1% y-on-y, due to increase in exports to Hong Kong. 217 saw a gain in export value of AUD18, in comparison with 216. On average, over 212-216, accounted for 15% by volume and 17% by value of total annual exports of avocados. Malaysia and Singapore remained the key export destinations for Australian avocados, representing 82% of export volumes in 217. Hong Kong (12% of export volumes in 217) is a major re-export hub for China. The Australian avocado industry aims to develop new export markets in South East Asia, such as Thailand and Japan. Chile, Mexico and the US represent the most significant competition to Australia in its key export markets. New Zealand is the most dominant exporter to Australia, amounting to 7,312 tonnes in 217. Imports from New Zealand spiked significantly in 217 over 216 due to speculation over shortage in domestic production. Mexico grows in importance as an export market for Australian avocados. Source: IHS Global Trade Atlas; Euromonitor International analysis 1
Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Quarterly highlights: Export volume Significant increase in export volumes to Hong Kong Volume (tonnes) Volume share 216 217 y-o-y growth 216 217 Malaysia 11 9-11% 55% 45% Singapore 68 75 1% 37% 37% Hong Kong, China 2 25 1,15% 1% 12% Brunei 4 5 25% 2% 2% Myanmar 2 - % 1% Kuwait 1 1 % 1% 1% Qatar 1 1 % 1% 1% Indonesia 3 1-67% 1% 1% UAE 1 1 % 1% % Fiji 1 - % % Malaysia and Singapore constitute two of the major markets for avocado exports from Australia, which has year-round production capacity due to its diversity of growing regions. The slight decline in exports to Malaysia can be attributed to higher demand from Hong Kong. Significant growth in exports to Hong Kong can be attributed to its role as a re-export hub, from where avocado supplies are sent to China to meet the country s growing demand. Indonesia and the UAE registered volume declines in. Others 2-1% 1% % Total 183 22 1% 1% 1% Source: IHS Global Trade Atlas; Euromonitor International analysis; countries are ranked based on 217 data 2
Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Quarterly highlights: Export value Slight decline in avocado prices facilitated by steady domestic production Value (AUD ') Value share Average price (AUD per kg) 216 217 y-o-y growth 216 217 216 217 y-o-y growth Malaysia 73 646-12% 57% 47% 7.2 7.2 % Singapore 434 463 7% 34% 34% 6.4 6.2-3% Hong Kong, China 19 176 826% 1% 13% 8.8 7.1-19% Brunei 29 36 24% 2% 3% 8.3 7.6-8% Myanmar 16 - - 1% - 9.2 - Qatar 1 14 4% 1% 1% 13.6 1.9-2% Indonesia 25 14-44% 2% 1% 7.5 1.7 43% Kuwait 5 5 % 1% % 5. 2.4-52% Fiji 4 4 % % % 9. 8.6-4% UAE 6 2-67% 1% % 5.4 3.2-41% Others 9 3-67% 1% % 8.1 8.1 % As a re-export hub, Hong Kong registered impressive value growth in 217, supported by increasing recognition of the fruit s high nutrition content in China. The China-Australia Free Trade Agreement (ChAFTA), signed in December 215, is having a positive influence on Australian exports. Australia s avocado industry continues to focus on developing a core market in South East Asian nations, as reflected in increased value exports to Myanmar and Brunei. The decline in avocado exports to Indonesia can possibly be attributed to higher unit prices in 217 over 216. Total 1,271 1,379 8% 1% 1% 7. 6.8-3% Source: IHS Global Trade Atlas; Euromonitor International analysis; countries are ranked based on 217 data 3
Key export markets for Australia Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Competitor insights: Key competitors Chile, Mexico and the US dominate exports to key Australian destinations Imports from source markets in 217: Value (AUD ) Mexico Chile USA Kenya New Zealand Israel Spain Philippines Australia Malaysia 117 1 15 317 88-115 37 777 Singapore 1,542 321 1,54 277 42 67 1 32 722 Hong Kong 2,852 1,282 519 172 3 37 6 24 19 Australia faces strong competition from Chile and Mexico in Hong Kong, which acts as a port of entry for avocados into the Chinese market. Chilean avocado exports to China have been on the rise, a result of the 215 free-trade agreement between the two countries and growing demand for avocados among Chinese consumers. Avocado producers in Mexico are focussed on diversifying their export destinations, which was mainly concentrated on the US until last year. This is due to Mexico facing possible policy changes by the Trump administration that could affect the avocado trade with the US. Source: IHS Global Trade Atlas; Euromonitor International analysis; Note: 1. Includes only export markets that have reported data to IHS Global Trade Atlas by May 217 2. All country exports are reported in FOB, conversely all imports are reported in CIF terms 4
Trade balance (tonnes) y-o-y growth (%) Trade balance (AUD ) y-o-y growth (%) Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix International trade analysis Australia is focussed on developing new export markets in Asia Exports (tonnes) Import (tonnes) -1, -2, -3, -4, -5, -6, -7, -8, Trade balance (volume) of the industry and y-o-y growth 211-217 Trade balance % y-o-y growth 211 212 213 214 215 216 217 392 471 392 12 222 183 22 2,83 5,359 1,118 6,38 5,8 3,696 7,33 2% 1% % -1% -2% -3% -4% -5% -6% -7% -8% Exports (AUD ) Import (AUD ) Trade balance (value) of the industry and y-o-y growth 211-217 1,614 1,715 1,77 573 1,212 1,271 1,379 11,46 19,764 4,771 3,17 25,542 17,63 37,856 Import volumes of avocados spiked by 98% from 216 to reach 7,33 tonnes in 217. The demand for avocados remain high in Australia, especially among millennial consumers. New Zealand is the only country with access to the Australian market for fresh Avocado imports. Only 5% of domestic Australian avocado production is exported, predominantly destined for Asian markets. Australia is close to securing new export agreements with Thailand and Japan, which will have positive impacts on export volumes to these markets. Queensland and Western Australia (WA) remain the major avocado producing regions. Production of avocados is booming in WA, making the development of export markets to take excess production of prime importance. Source: IHS Global Trade Atlas; Euromonitor International analysis 5-5, -1, -15, -2, -25, -3, -35, -4, Trade balance % y-o-y growth 211 212 213 214 215 216 217 2% % -2% -4% -6% -8% -1%
Export volume (tonnes) Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix International trade exports Malaysia and Singapore represent the key export destinations 5 45 4 35 3 25 2 15 1 5 211 212 213 214 215 216 217 Others Fiji United Arab Emirates Indonesia Qatar Kuwait Myanmar Brunei Hong Kong, China Singapore Malaysia The Malaysia-Australia Free Trade Agreement, which has been in place since 213, has boosted avocado exports to Malaysia. Export volumes increased from 63 tonnes in 213 to 9 tonnes in 217. It dipped in 214 because of a reduced harvest. Singapore, being a non-protocol market, has been a consistent importer of Australian avocados. However, export volumes to Singapore have declined from 126 tonnes in 215 to 75 tonnes in 217 due to competition from New Zealand product. Source: IHS Global Trade Atlas; Euromonitor International analysis; raw data is available in the appendix 6
Export value (AUD ') Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix International trade exports Sharp increase in value exports to Hong Kong in 217 2, 1,8 1,6 1,4 1,2 1, 8 6 4 2 211 212 213 214 215 216 217 Others United Arab Emirates Fiji Kuwait Indonesia Qatar Myanmar Brunei Hong Kong, China Singapore Malaysia Malaysia comprised 47% of total value exports of avocados from Australia in 217, amounting to AUD.6 million. The slight decline in value exports from 216 to 217 can be attributed to the frustration of buyers in destination markets with fluctuating prices of Australian avocados. Singapore was the most prominent export market for Australian avocados until 215, when Malaysia surpassed it. The growth in value exports to Hong Kong is related to its role as a re-export hub to China. Source: IHS Global Trade Atlas; Euromonitor International analysis; raw data is available in the appendix; Trade and Investment Queensland 7
Import volume (tonnes) Import value (AUD ') Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix International trade imports New Zealand represents majority of imports, Mexico is an upcoming partner 8, Volume of imports to Australia by source 211-217 4, Value of imports to Australia by source 211-217 7, 35, 6, 3, 5, 4, New Zealand 25, 2, New Zealand 3, 15, 2, 1, 1, 5, 211 212 213 214 215 216 217 211 212 213 214 215 216 217 New Zealand exports almost 8% of its avocado produce to Australia. Import volumes of avocados from New Zealand spiked significantly in 217 over 216, registering a volume growth of 98% to reach 7,312 tonnes. Source: IHS Global Trade Atlas; Euromonitor International analysis; raw data is available in the appendix 8
Export volume (tonnes) $/kg Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix International trade prices Avocado prices remain relatively stable due to steady domestic supply Australian avocado exports- volume and unit price ( 211-217) 5 45 4 35 3 25 2 15 1 5 211 212 213 214 215 216 217 Volume (Tonnes) Unit price (AUD) Unit price (USD) 8 7 6 5 4 3 2 1 Source: IHS Global Trade Atlas; Euromonitor International analysis; export valuations are FOB 9
Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Key trends: Consumers and business dynamics Health and wellness spurs the consumption of avocados in major export markets Malaysia: Price-conscious consumers prefer to prepare at-home meals Malaysian consumers are highly price-conscious, preferring to save money by eating at home. Total per capita consumer expenditure and per capita consumer expenditure on fruits stood at AUD7,624 and AUD9 respectively in 216. Malaysia ranks 23 on World Bank s Ease of Doing Business, with its government focused on reaching first-world status by 22. The government introduced a goods and services tax (6%) in 215, but the exemption of basic food items and fresh produce from this tax has encouraged consumers to buy fresh ingredients to prepare more meals at home rather than dining out. Singapore: Government initiatives drive healthy consumption Singapore is characterised by high regulatory quality and a business-friendly climate, ranking second in the World Bank s Ease of Doing Business report in 217. With the government intensifying its efforts to promote healthy consumption and living, consumers are increasingly informed and discerning regarding their diet, and put considerable emphasis on local produce despite significant imports. Total per capita consumer expenditure and per capita consumer expenditure on fruit stood at AUD26,96 and AUD195 in 216. Hong Kong: Consumption of fruit is influenced by rising health-consciousness In Hong Kong, total per capita consumer expenditure and total per capita consumer expenditure on fruit stood at AUD43,717 and AUD425 respectively in 216. This is among the highest in Asia-Pacific, supported by rising health-consciousness among local consumers. In the Index of Economic Freedom 216 by The Heritage Foundation and The Wall Street Journal, Hong Kong achieved the top rank globally, which is illustrative of a highly favourable regulatory environment, allowing businesses to flourish under free-market ideals. Indonesia: Increased investments in infrastructure is expected to boost logistics Indonesia developed a nine-pillar economic strategy - Nawa Cita, which was launched in 214. It envisioned increasing productivity and competitiveness through investment in infrastructure which includes construction and maintenance of roads and improved connectivity within the country to improve the country s overall logistics ranking. Health-conscious consumers are demanding healthier food in restaurants and other food service establishments in Indonesia. The total per capita consumer expenditure and total per capita consumer expenditure on fruit stood at AUD2,838 and AUD73 in 216. Source: IHS Global Trade Atlas; Euromonitor International analysis 1
Import volume (tonnes) y-o-y growth Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Market overview: Malaysia Australian avocados enjoy fresh appeal due to shorter freight distance Major exporters of avocado to Malaysia 216: volume share Import volume from Australia 211-216 New Zealand 8% USA 7% Kenya 11% Others 11% South Africa 13% Australia 5% Countries Import volumes 216 (tonnes) Total 2,76 Australia 1,45 South Africa 275 Kenya 226 New Zealand 164 USA 149 1,2 1, 8 6 4 2 1,45 67% 5% 626 418 274 294 328 27% 7% 12% 211 212 213 214 215 216 8% 7% 6% 5% 4% 3% 2% 1% % Others 216 Imports (Tonnes) (tonnes) Y-o-Y y-o-y growth growth In 216, Australia represented 5% of Malaysia s 2,76 tonnes of imports, growing by 67% from 215. Imports have steadily grown year-on-year, because the Hass variety of avocados supplied from Australia are preferred by customers. In comparison to South Africa and the US, Australian suppliers have the advantage of delivering high quality, fresh (air-freighted) produce over a shorter route. Despite the quality of New Zealand imports being considered equal to that of the Australian product, Australia has a dominant share of the Malaysian market due to the Malaysia-Australia Free Trade Agreement. Source: IHS Global Trade Atlas; Euromonitor International analysis Market Overview: This is a special section rotated in every report, that reports on key markets on an annual basis 11
Import volume (tonnes) y-o-y growth Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Market overview: Singapore Australian avocados face stiff competition from US and Mexican supplies Major exporters of avocado to Singapore 216: volume share Kenya 5% New Zealand 19% Australia 19% Others 7% Mexico 19% USA 31% Countries Import volumes 216 (tonnes) Total 4,21 USA 1,32 Mexico 811 Australia 84 New Zealand 788 Kenya 214 12 1 8 6 4 2 Import volume from Australia 211-216 8% 98 1% 7% 931 5% 5% 865 3% 781 84 % 73-5% -1% -15% -2% -26% -25% -3% 211 212 213 214 215 216 Others 272 Imports (Tonnes) (tonnes) Y-o-Y y-o-y growth In 216, Australia represented 19% of Singapore s 4,21 tonnes of imports, growing by 3% from 215. The dominant share of the US imports can be attributed to its free-trade agreement with Singapore. Mexican avocados appear to be losing appeal among importers due to quality issues resulting from a lengthy transit period via sea freight. Hass is the main variety of avocados preferred by consumers because it is considered to have a good flavour, with a higher oil content and creamier texture compared to green skin varieties. Source: IHS Global Trade Atlas; Euromonitor International analysis Market Overview: This is a special section rotated in every report, that reports on key markets on an annual basis 12
Import volume (tonnes) y-o-y growth Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Market overview: Hong Kong Chile and Mexico remain dominant suppliers of avocados to Hong Kong Major exporters of avocado to Hong Kong 216: volume share United States 8% South Africa 2% Peru 12% Mexico 25% Others 3% Chile 5% Countries Import volumes 216 (tonnes) Total 16,749 Chile 8,457 Mexico 4,176 Peru 1,932 United States 1,374 South Africa 366 3. 25. 2. 15. 1. 5.. Import volume from Australia 211-216 258 141% 19 63% 171 36% -89% 58% 71 28 45 211 212 213 214 215 216 2% 15% 1% 5% % -5% -1% -15% Others 444 Imports (Tonnes) (tonnes) Y-o-Y y-o-y growth growth In 216, Australia represented 1% of Hong Kong s 16,749 tonnes of imports, growing by 141% from 215. The growth can be attributed to increasing recognition of Australian suppliers ability to deliver fresh avocados compared to the lengthy sea route used by Chile and Mexico. Hong Kong imports significant quantity of avocados from Chile and Mexico, especially Hass avocados. Supply from Chile grew significantly by 355% in 216, to reach 8,457 tonnes. Source: IHS Global Trade Atlas; Euromonitor International analysis Market Overview: This is a special section rotated in every report, that reports on key markets on an annual basis 13
Import volume (tonnes) y-o-y growth Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Market overview: Indonesia Limited avocados trade with Indonesia, in competition with the US Major exporters of avocado to Indonesia 216: volume share Import volumes from Australia 211-216 6 5 38% 5.6 4.5 5% 4% United States 5% Australia 5% Countries Import volumes 216 (tonnes) Total 9 Australia 4.5 USA 4.5 4 3 2 1 2.7 239% 2.3 1.7-16%.3-85% -19% 3% 2% 1% % -1% 211 212 213 214 215 216-2% Imports (Tonnes) (tonnes) Y-o-Y y-o-y growth In 216, Australia represented 5% of Indonesia s 9 tonnes of imports, declining by 16% from 215. Indonesia imports avocados from the US in addition to Australia to meet domestic demand. Due to import permit restrictions, there is limited trade in avocados with Indonesia at present. However, the Australian Horticulture Exporters Association (AHEA) is hopeful that the Indonesia-Australia Comprehensive Economic Partnership Agreement, which is currently under negotiation, will boost trade with Indonesia. Source: IHS Global Trade Atlas; Euromonitor International analysis Market Overview: This is a special section rotated in every report, that reports on key markets on an annual basis 14
Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Appendix International trade exports Volume of exports from Australia by destination (tonnes) Value of exports from Australia by destination (AUD ') Country 211 212 213 214 215 216 217 Country 211 212 213 214 215 216 217 Malaysia 67 62 63 31 89 11 9 Singapore 129 145 161 57 126 68 75 Hong Kong 2 4 5 3 2 25 Brunei 2 1 2 1 2 4 5 Myanmar 2 Kuwait 3 1 1 Qatar 1 1 1 1 Indonesia 7 8 5 4 3 1 UAE 63 89 3 1 1 Fiji 1 Others 122 158 157 4 2 2 Total 392 471 392 12 222 183 22 Malaysia 27 217 35 165 438 73 646 Singapore 459 468 624 39 719 434 463 Hong Kong 12 24 2 32 27 19 176 Brunei 8 5 9 12 13 29 36 Myanmar 16 Kuwait 1 3 9 4 3 1 14 Qatar 44 37 22 3 6 25 14 Indonesia 7 5 5 UAE 1 1 1 3 4 4 Fiji 294 36 15 1 6 2 Others 526 593 783 2 2 9 3 Total 1,614 1,715 1,77 573 1,212 1,271 1,379 Source: IHS Global Trade Atlas Note: figures may not total 1% due to rounding 15
Horticulture trade intelligence: Avocado: 217: Content / Quarterly highlights / Competitor insights / Trade flow / Operating environment / Market overview / Appendix Appendix International trade imports Volume of imports to Australia by source (tonnes) Value of imports to Australia by source (AUD ') Country 211 212 213 214 215 216 217 Country 211 212 213 214 215 216 217 New Zealand 2,83 5,359 1,118 6,38 5,8 3,696 7,312 Total 2,83 5,359 1,118 6,38 5,8 3,696 7,312 New Zealand 11,46 19,764 4,771 3,17 25,542 17,63 37,784 Total 11,46 19,764 4,771 3,17 25,542 17,63 37,856 Horticulture Innovation Australia Limited (Hort Innovation) makes no representations and expressly disclaims all warranties (to the extent permitted by law) about the accuracy, completeness, or currency of information in Horticulture Trade Intelligence Reporting 217-219. Reliance on any information provided by Hort Innovation is entirely at your own risk. Hort Innovation is not responsible for, and will not be liable for, any loss, damage, claim, expense, cost (including legal costs) or other liability arising in any way, including from any Hort Innovation or other person s negligence or otherwise from your use or non-use of Horticulture Trade Intelligence Reporting 217-219, or from reliance on information contained in the material or that Hort Innovation provides to you by any other means. Source: IHS Global Trade Atlas Note: figures may not total 1% due to rounding 16